Funeral costs and considerations

Navigating the world of funeral homes, burial options, and all the associated costs can feel both daunting and overwhelming, particularly when simultaneously mourning the loss of a loved one. But there are some basic rules and standards when it comes to costs that funeral homes are obliged to honor, making the process a little more manageable.

Costs vary based on whether the funeral includes a burial or a cremation and what additional services are added.

The median cost of an adult funeral with viewing and burial was $7,360 in 2017, according to the most recent statistics compiled by the industry trade group the National Funeral Directors Association (NFDA).1 When the cost of a vault is added, something required by most cemeteries, the cost rises to $8,755.

The NFDA’s cost estimates include the basic service fee, the removal of remains to a funeral home, embalming and other preparations of the body, a metal casket, use of the funeral home and the assistance from the staff during a viewing and funeral ceremony, use of a hearse for the body and also a car or van for family, and minimal printed memorials — such as cards and a register book.

The median cost of a funeral with viewing and cremation was $6,260 in 2017, according to the NFDA. The difference in costs reflects the difference in services and the associated costs when someone is buried versus cremated. For example, a hearse and metal casket are needed for a burial but not a cremation. A cremation would include cremation fees and the cost of a cremation casket and urn.

The number of people cremated versus buried is slightly higher per year, according to NFDA, and the gap is expected to grow in future decades.

Funeral costs can also vary regionally and be affected by competition. There are over 19,000 funeral homes in the U.S., according to the NFDA’s most recent numbers. On a state-by-state basis, New York has the most funeral homes, at 1,080, and Alaska has the fewest, at 17, according to the most recent U.S. Census Bureau figures .2

Tour the funeral facility

It is important for families to feel comfortable with those caring for their loved ones, so asking for a tour of the facilities or a description of the level of service from the funeral director is appropriate, said Walker Posey, a funeral director with Posey Funeral Directors in North Augusta, S.C.

He said that the family should ask what kind of notifications the director has made, such as for Social Security and insurance. In addition to financial considerations, family members should talk with the director about what kind of service they want, the length of the service and how they want the person who has passed to be remembered during the service.

“Additionally, it is helpful to know that as the funeral director walks through this difficult time with your family, they need to be aware of special circumstances, financial considerations and relationship dynamics that may assist them in meeting your family’s needs,” Posey said in an email exchange.

Know the ‘Funeral Rule’

While funeral costs vary depending on where the service takes place and what services are chosen, the rights of consumers do not change state to state.

According to the Federal Trade Commission’s Funeral Rule , you have the right to choose and pay for only the goods and services you want or need, regardless of whether you are making arrangements after a death has occurred or in advance.3 The rule, which went into effect in April of 1984 and was revised a decade later, states that you are allowed to compare prices among funeral homes and select only the arrangements you want at whatever home you use.

Of note: the rule applies only to funeral homes and can’t be applied to so-called third party sellers, such as casket or monument dealers. It also does not apply to cemeteries that don’t have an on-site funeral home.

The Funeral Rule also limits what a funeral home can charge as a “basic service fee.” That’s the non-declinable portion of funeral costs, should you go through a funeral home. The basic service fee refers to services that are consistent with all funerals, no matter what specifics a family has arranged. They include planning the funeral, getting the necessary permits and copies of death certificates, preparing the notices, housing the remains and coordinating with the cemetery, crematory or any other sources.

The average cost of the basic service fee was $2,100 per adult funeral in 2017, according to the NFDA. That number was consistent regardless of whether the funeral was with a burial or cremation.

Ways to cover or limit funeral costs

According to the non-profit Funeral Consumers Alliance, there are a number of ways to reduce funeral costs while still honoring family members in a way that you feel comfortable. 4

Options include:

Direct cremation or direct burial, where the body is cremated or buried shortly after death, therefore eliminating the costs associated with embalming, viewing, or family visitation;

Using an alternative container, rather than a casket following cremation or a plain casket for burial;

Whole body donation to a local medical school for research – a process that is inexpensive or free but requires the donor filling out necessary paperwork ahead of time.

Also consider insurance or other payment arrangements made prior to death. These can include a “payable on death account” in which the bank you work with guarantees that the funds you set aside for your funeral are made available shortly after your death to the beneficiary of your choice; the funds are FDIC insured and cannot be accessed prior to death.

In addition, various types of life insurance give a lump-sum amount to your beneficiaries after death, some of which could be used to pay for burial costs.

Simplified whole life insurance or guaranteed acceptance life insurance are other options. These types of life insurance are often used to help cover final expenses. (It is important to note that these kinds of life insurance policies aren’t what some people may refer to, somewhat slangily, as “burial insurance”).

Some funeral providers will also sell “pre-need insurance” to cover the costs of a funeral. While most funeral homes require immediate payment for all services, some may be willing to arrange an installment plan or to offer a moderately lower rate if paying in cash or pre-paying for basic services prior to the death.

One of our financial advisors can contact you to discuss taking care of loved ones, a family business, or a group of employees.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel.Opinions expressed by those interviewed are their own, and do not necessarily represent the views of MassMutual.

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